There are plenty of lucrative website buying opportunities out there, regardless of your budget.
Even if you only have as little as a few hundred dollars, there absolutely is a money making website out there that’s right for you.
We’ve bought established websites for as little as $100 all the way up to $40,000. Some of the best sites in terms of both consistency and return on investment were those that were under $500.
Examples Of Websites We have Purchased & Their Prices
Below is a list of what we paid for some of our “top performers”. They have been split in to three separate categories:
- Under $1,000
- $1000-$5000
- Over $5000
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Websites in the $500-$5000 range have also proven to be excellent investments.
When we first started buying sites a few years ago, we stuck to those that were under $5,000 until we built up a little more confidence and were able to refine our “formula”. Only then did we begin venturing in to more expensive websites that generated more income.
During our initial website “accumulation” phase, the actual niche of the website didn’t matter as much as it’s level of risk and reward. If the site looked like it was low risk and generated consistent revenue we would buy it, even if we were not familiar with the niche.
What Determines The Cost Of An Established Website?
The cost of an established website will generally depend on the following factors:
- Traffic & Earnings
- Track record & history
- Risk / reward (high, medium, low)
- Upside potential
Traffic & Earnings
One of the first things that will determine the cost of an established website is it’s traffic source, and it’s earnings. Remember that both of these correlate, since you cannot generate consistent income without consistent traffic, so it’s important to take both in to consideration when evaluating any website.
Things to look out for:
- What is the source of traffic? (organic, PPC, affiliate etc)
- Are traffic stats consistent?
- How much monthly profit does the site generate?
- How long has the site been generating revenue?
- Do you see room for improvement in traffic / revenue?
Websites that meet our criteria have steady traffic from multiple sources, stable income, have upside potential, and generate an annual return of at least 100%.
Track Record
A site that has proven stability both in terms of traffic and earning history will fetch considerably more money than one than one that does not. It’s not uncommon for websites with only a few months of history to sell for as little as 4-6 X net monthly earnings, where as sites with a 1-3 year history sell for as much as 18-24 X net monthly earnings.
>Show examples here<
Sites with a longer track record are generally considered a lower risk-making them more worthy of a higher price. This brings us to the next factor that determines the cost of a website…
Risk / Reward
A money making website is essentially the same as any other type of investment whether it be stocks, commodities, real estate etc. Your return on investment (ROI) will depend on the level of risk you are willing to take.
High risk = high reward
Moderate risk = moderate reward
Low risk = low reward
Those of you familiar with real estate investing know that one of the biggest factors determining the cash on cash return of a rental property depends on the properties level of risk. For example properties in poor neighborhoods will generate a much higher return than those found in more upscale areas, simply because there is a much higher risk of their tenant’s not paying their rent on time. More risk = more reward!
The same goes for equities. Stocks such as Proctor & Gamble, Clorox, and Coca Cola for example are considered low risk investments over the long term. For this reason, they will not generate a return anywhere near that of growth companies such as Apple for instance.
The websites that meet our criteria generally yield a 100-200% ROI, simply meaning that you will recover your initial investment within 6 months to a year. There are exceptions of course, an some sites may yield a lower return if they are extremely low risk.
An example of a low risk website would be one that is not dependent on a single traffic source, or receive direct type in traffic. These types of sites will always fetch a premium compared to a site that receives all of it’s traffic from search engines for example, and could potentially be “wiped out” overnight.
Putting It All Together
The cost of a money making website will depend on site statistics, and the amount of risk you are willing to take. The higher the risk, the higher the reward. Over the last three years we have developed a system for buying websites that minimizes the risk while maximizing the reward.
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